BILL ANALYSIS Ó
Bill No: AB
1074
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 1074 Author: Atkins
As Amended: June 20, 2013
Hearing Date: June 25, 2013
Consultant: Art Terzakis
SUBJECT
Horse Racing
DESCRIPTION
AB 1074 extends the sunset date by one year for the
statewide marketing organization that is responsible for
marketing and promoting thoroughbred and fair horse racing
and also makes adjustments to existing Horse Racing Law to
pave the way for the California Horse Racing Board (CHRB)
to adjust racing dates in the central and southern zones in
order to address the scheduling issues resulting from the
impending closure of Hollywood Park Racecourse.
Specifically, this measure:
1)Extends the sunset date on the statewide marketing
organization for one year (from January 1, 2014 to
January 1, 2015).
2)Provides that the CHRB may allocate 49 racing weeks per
year in the combined central zone and southern zones.
3)Requires the CHRB, from the weeks available in the
combined central and southern zones, to allocate a
minimum of seven weeks per year to a thoroughbred racing
association to conduct thoroughbred racing at a racetrack
that was used to conduct a thoroughbred race meeting in
the southern zone prior to 2012. (Applicable to Del Mar
Racetrack for purposes of preserving its traditional
racing dates.)
4)Requires the CHRB, from the weeks available in the
combined central and southern zones, to allocate a
AB 1074 (Atkins) continued
Page 2
minimum of 25 weeks per year to a thoroughbred racing
association to conduct thoroughbred racing at a racetrack
that was used to conduct a thoroughbred race meeting in
the central zone prior to 2012. (Applicable to Santa
Anita Racetrack for purposes of preserving its
traditional racing dates.)
5)Prohibits the CHRB from allocating dates to a
thoroughbred association in the southern zone for the
purpose of conducting racing during daytime hours if a
thoroughbred racing association is conducting racing in
the central zone on the same date during daytime hours.
6)Also, deletes obsolete provisions of existing Horse
Racing Law.
EXISTING LAW
Article IV, Section 19(b) of the Constitution of the State
of California stipulates that the Legislature may provide
for the regulation of horse races and horse race meetings
and wagering on the results. Existing Horse Racing Law
provides that the California Horse Racing Board (CHRB)
shall regulate the various forms of horse racing authorized
in this state.
Existing law (Business & Professions Code Section
19605.73), operative until January 1, 2014, authorizes
thoroughbred racing associations, fairs, and the
organization responsible for contracting with thoroughbred
racing associations and fairs with respect to the conduct
of racing meetings, to form a private, statewide marketing
organization to market and promote thoroughbred and fair
horse racing. If a marketing organization is formed,
existing law requires an amount not to exceed 0.25% of the
total amount handled by each satellite wagering facility to
be distributed to the marketing organization, and imposes
certain requirements on the marketing organization,
including that the marketing organization annually submit
certain information to the CHRB.
Existing law (Business & Professions Code Section 19530)
provides the CHRB with the authority to allocate racing
weeks to an applicant pursuant to the provisions of the
Horse Racing Law and to specify such racing days, dates,
and hours for horse racing meetings as will be in the
AB 1074 (Atkins) continued
Page 3
public interest.
Existing law (Business & Professions Code Section 19531)
state the CHRB shall make allocations for racing weeks,
including simultaneous racing between zones as it deems
appropriate. The maximum number of racing weeks that may
be allocated for horse racing other than at fairs, shall be
as follows: (a) for thoroughbred racing: 44 weeks per year
in the northern zone, 42 weeks per year in the central
zone, and seven weeks per year in the southern zone; (b)
for harness racing: 25 weeks per year in the northern zone;
(c) for quarter horse racing: 25 weeks per year in the
northern zone; (d) for harness racing and quarter horse
racing: a total of 77 weeks per year in the combined
central and southern zones.
Existing law (Business & Professions Code Section19532)
specifies that: (a) any association licensed to conduct
thoroughbred racing in the northern zone may receive no
more than 35 weeks of that racing and (b) any association
licensed to conduct thoroughbred racing in the central zone
may receive no more than 17 weeks of that racing, except
that any association which conducts a split meeting may
receive up to weeks of that racing. No more than one such
split meeting may be licensed in any one year.
Existing law (Business & Professions Code Section 19549)
provides the maximum number of racing weeks that may be
allocated to a fair shall be for four weeks each, except
under specified conditions.
BACKGROUND
Purpose of AB 1074: On May 9, 2013, the CHRB was notified
that Hollywood Park Land Company, as well as its affiliated
racing associations, would not be requesting the CHRB to
allocate any 2014 racing dates at Hollywood Park racetrack
in Inglewood. Thus, after 75 years of horse racing, 2013
will be the final year of live racing, training and
stabling at Hollywood Park - one of America's premier
racing and historic racing venues that hosted Seabiscuit
and the first Breeders' Cup. In this regard, the last day
of "live" racing at Hollywood Park will be December 22,
2013. The Hollywood Park stable area is expected to close
by the end of the year. Although the closure of Hollywood
Park was long expected it did surprise many folks in the
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Page 4
national racing industry. From an economic point of view,
the land now has a higher and better use and the track's
260-acre footprint will be turned into 3,000 new housing
units, including single-family townhomes and condos; 25
acres of parkland, including a 10-acre central park; and a
retail and entertainment district, anchored by a movie
theatre, office space and a 300-room hotel.
It's the second major California racetrack to close since
2008 when Bay Meadows racetrack in San Mateo was shuttered
after 74 years of racing to make way for a similar
development.
According to the author's office, this measure is intended
to give the CHRB and the racing industry the maximum
flexibility to adjust California's racing calendar to meet
the reality of Hollywood Park's closure - it grants the
CHRB the flexibility to allocate thoroughbred racing dates
in the central and southern zones, while preserving the
traditional seven weeks of racing at Del Mar and a minimum
of 25 weeks of racing at Santa Anita. This measure would
also extend the sunset date on California's statewide horse
racing marketing program until 2015.
As noted above, the racing map in California is divided
into three zones: northern, central, and southern. For the
purposes of Thoroughbred racing, Santa Anita and Hollywood
Park are in the central zone. Del Mar is in the southern
zone and Golden Gate Fields is in the northern zone. This
measure combines the central and southern zones for
purposes of the allocation of racing dates.
At its May 23, 2013 meeting the CHRB responded to the
closure of Hollywood Park racetrack and allocated racing
dates for 2014 and 2015. Along with the standard fall meet
at Santa Anita and the summer meet at Del Mar, the CHRB
voted unanimously to award Santa Anita an extended season
from December 26, 2013 through July 6, 2014. The CHRB also
allocated a five-week fall meet at Del Mar that would run
November 5 through December 7. Similar dates were assigned
for 2015.
To be specific, the 2014 dates the CHRB settled on are:
Santa Anita - December 26, 2013 through July 6; Del Mar -
July 16 through September 3; Fairplex Park (LA County Fair)
- September 4-23; Santa Anita - September 25 through
November 2; and Del Mar - November 5 through December 7.
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The 2015 dates are: Santa Anita - December 26, 2014 through
July 5; Del Mar - July 15 through September 7; Fairplex -
September 10- 25; Santa Anita - September 26 through
October 25; and Del Mar - October 28 through December 6.
The shortened 2015 Fairplex is contingent on the selection
of Santa Anita to host the 2015 Breeders' Cup.
Marketing Program: SB 27 (Maddy), Chapter 335, Statutes of
1998, among its provision, created a private statewide
marketing organization for thoroughbred and fair racing
that is funded by 0.4 percent of the in-state off-track
handle. The funds generated from this distribution are
used to market California horse racing on a statewide
basis. The California Marketing Committee (CMC) is
generally responsible for promoting horse racing in the
state by developing and implementing a marketing plan that
will increase on-track and off-track attendance throughout
the state.
PRIOR/RELATED LEGISLATION
SB 1072 (Calderon), Chapter 283, Statutes of 2010. Among
other things, required thoroughbred racing associations and
fairs to deduct an additional amount of the total handle on
exotic wagering for purse augmentation; authorized the CHRB
to license entities to operate "exchange wagering" systems;
required each exchange wagering licensee to annually
distribute a specified amount of exchange wagering revenue
to the existing jockey health and benefit welfare fund;
authorized the thoroughbred racing industry to use monies
from horse racing wagering pools to promote the Breeders'
Cup; and, extended the sunset date on the statewide
marketing program by 3-years.
SB 766 (Negrete McLeod), Chapter 766, Statutes of 2009.
Authorized the CHRB to shift money around from various
funds, including the marketing funds, which are in surplus,
to others that are in deficit, such as the Vanning and
Stabling Account.
AB 1736 (Governmental Organization), Chapter 444, Statutes
of 2007. Among other things, extended the sunset on
provisions to enable racing associations and fairs to fund
taking part in the statewide horse racing marketing
program.
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AB 2164 (Plescia), Chapter 80, Statutes of 2004. Extended
the sunset on provisions to enable racing associations and
fairs to fund taking part in the statewide horse racing
marketing program to 2006.
AB 2931 (Horton), Chapter 922, Statutes of 2002.
Authorized the racing associations to use funds earmarked
for the CMC for use in developing a program to off-set
workers' compensation rates for horse trainers in the
state.
SB 27 (Maddy), Chapter 335, Statutes of 1998. Among other
things, granted major license fee relief ($40 million
annually) and limited out-of-state full-card simulcasting.
Also, created the CMC that is funded by 0.4 percent of the
in-state off-track handle.
SB 103 (Maddy), Chapter 10, Statutes of 1998. Provided
for California's involvement in the NTRA by permitting
thoroughbred owners to (pay to) take part in a national
marketing program to increase interest in horse racing.
SUPPORT: As of June 21, 2013:
California Thoroughbred Breeders Association, Del Mar
Thoroughbred Club, Oak Tree Racing Association,
Thoroughbred Owners of California and Del Mar Fairgrounds
OPPOSE: None on file as of June 21, 2013
FISCAL COMMITTEE: Senate Appropriations Committee
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